Attorneys have seen a stark rise in legal malpractice claims in recent years. In May 2022, Law.com reported that 11 insurance companies providing coverage to about 80% of the Am Law 100 firms had expressed concern over the rising costs to cover malpractice claims. With several hundred-million-dollar payouts becoming more common, attorneys must take steps to reduce their risk exposures for the sake of their businesses and clients alike.
To mitigate risk, attorneys need to have a strong grasp of where they are exposed. Consider the following three most common legal malpractice claims against attorneys:
- Conflict of interest claims remain the most common against attorneys. Claims can derive from an attorney knowing confidential client information that could impact another client, or an attorney representing multiple family members with claims against each other. Attorney’s must prioritize due diligence prior to representing a client to identify any potential conflicts of interest. In some cases attorney’s may utilize a conflict of interest waiver, however they are not applicable in every situation and should be thoroughly considered.
- Administrative errors account for a large percent of malpractice claims. Simple mistakes such as a wrong number being recorded, a seemingly harmless typo or failure to meet deadlines due to an out-of-date calendar can have threatening implications. A regularly updated calendar can help ensure documents are prepared far enough in advance to be thoroughly reviewed multiple times and filed ahead of deadline.
- Lack of knowledge or improper application of the law is the third most common reason for a legal malpractice claim. Given the everchanging environment of society and subsequently, law, attorney’s must be diligent about any potential changes, especially those related to their clientele. For example, COVID-19 caused various changes to HIPPA, OSHA regulations, tax requirements and more making it rather difficult to keep up. While attorneys cannot know everything, they must understand where they may have knowledge gaps and allow the time to research and understand those gaps to offer proper representation. Failure to do so could result in perceived negligence.
Of course, no matter how much preparation is in place to avoid a claim, mistakes happen, details are missed in discovery and typos slip through the cracks. In these cases, it is vital to have adequate lawyer professional liability insurance (LPLI). LPLI can help protect an attorney from negligence, errors or omissions and other claims that may be made against attorneys. As the number of claims and million-dollar payouts rise, attorneys need to consider where their business might be vulnerable, and take the proper steps to protect their business, employees and clients. Working with an experienced agent or broker that understands the risk exposures attorneys and their law firms deal with is the first step to ensuring these claims can be mitigated or avoided where possible.